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tv   [untitled]    December 11, 2013 4:30am-5:01am PST

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the jargon. i know it talks about the capping at 4 percent. i'm sure it was for the funding models for 2015. i'm sure we are talking about not capping the profits this time around. limiting the icm and other medical services charges. i hear there is not a lot of progress made on that and i heard there was a goal of trying to limit the fees of 10 percent, are we on track for that or do you think it will be higher. with the accountability and transparency piece, is that, is part of the negotiations to get kaiser to report on the frequency on things like infections, unplanned hospital readmissions? and on the performance guarantees are they tied to rewards and penalties if the provider doesn't meet
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those performance guarantees, if there is a penalty attach or incentives for doing a great job on that. i apologize, it's probably clearly in front of me, i just don't understand the report. >> thank you. >> i may need a little help to remember those. the first one are we making progress on it? we are not making as much progress on icm as i had hoped but we are going to make as much progress as possible. i won't be able to say for sure until january whether we've made progress on that. the performance guarantees are ones where there is a penalty and if there is not an award but there is a penalty if those are missed. >> can i point out. i'm not sure if you heard it, larry, we made the performance guarantees
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far more stringent. kaiser was meeting the pge's and we are holding them to 9 percent. and there is a penalty attached to their not meeting the measures. >> on the profit cap, i think that would be most appropriate in the fully funded model and there are discussions on going on what that would look like and the board will see it once the actuaries are done at the january board meeting. did i miss anything larry? >> transparency. i'm glad you mentioned that. it's been a topic of enormous amount of discussion about where we are going with transparency and what kind of data do we need and how we get there and including the ways and inappropriate hospitalizations, etc, that's been a topic of great discussion. we don't have
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a date as to when the date will be available but we are making progress that are agreeing to the data that equals the word transparency. >> i just want to also point out that before we review the proposed rates we do a utilization analysis and we look at the 25 high cost claims and last year and medical team went and literally pulled those records and went through each one of them and lisa and i went through how you used to have a pharmacist and nurse and said whether this is appropriate to have this many pneumonia aspirations etc because we understand what they mean and they could be in fact hospital induced. i believe last year that an reported out that every single one of the health cost claims, we pulled 17 of the 25 and reviewed them were legitimate high cost claims and
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not induced by the hospital. although we don't look at every single claim, we certainly look at the ones that would drive our claims experience in terms of rates. >> any other public comment? seeing none, i'm sorry. mr. scott? >> yes. i would, and i don't want this to be miss construed. i would ask for all interested parties in this process to recognize that this is a case that is being mixed. it is not in the oven yet. we need a little bit of latitude to fully and completely be responsive. i appreciate very much for your questions today, they are on point. these are precisely the lines of inquiry we are pursuing with kaiser, but we
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also know that if we engage in premature conclusions about what this outcome is going to be, we are going to find ourselves in a place we may not want to be. i would just ask for a little bit of patience. we are in the kitchen, we are getting the right ingredients, some match to our expectations and some we may have to change or modify, but the cake is not in the oven. even after we complete these discussions, there is a whole rate setting process and there will be ample opportunity to continue to have this dialogue and that includes not only those that are represented but our city fathers as well. >> commissioner fraser? >> and mothers, excuse me. >> we do like the cooking analogy. i want to second commissioner scott's comments. setting arbitrary target for
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one or other rates is not good policy and not good financial policy. what we are trying to do is get great quality care at a great price and kaiser has a unique model which many people love. there are many that members particularly love. there is where you can do less of this because we arbitrarily decided it needs to be an x personal of the rate which is not the way we should go. we should look at the overall rate. i want you to look at what's been reported already by all hospitals and hospital acquired infections are publically reported by all hospitals. >> is there a particular site for that? >> yeah. i'm not sure whether it's federal or state website.
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i don't really go look at them. they are just reports. >> i believe it's the website. i heard they are limiting that website. we may ask the board of supervisors to put pressure on the state because the public scrutiny of that data is really important. we'll get back to you on that. >> any other comments? public comment? seeing none, all right. item no. 9. >> the clerk: discussion item question the blue shield's calculation. >> lisa gut be. i'm going to accept set up the questions. one of our unions is looking at
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the rates and benefits process as the question of hsf regarding the rate setting process from the 2013 and he basically was asking about how was the pricing done and concern that maybe we overpriced 2013 and so i thought the best way to answer that question was how to actuary through the health service board address the question and -- kosher. >> okay. neale coacher, hue hewitt. you have in your packet 2013-2014 rating. i even have an executive summary. can you hear me okay ? the question
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relates to the way trends are applied to calculate 2013-2014 premium equivalence. in this presentation to analyze the use of the blue shield renewal presented at the health services board will be reviewed. i actually have that page as the very last page of this document. at that time, i don't mean to go all the way to the end. we pointed out the medical spin we projected for the earlier data in 2013 was determined to be 56815 and because of the incredibly good work of the aco's we can actually 1 year later because we had more information bring that down which means we actually did not increase the rates for 2014 because between that point in time, and the point in time whenever we rated for the subsequent period data
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improved, trim lines improved and we took a leap of faith and put a zero through. >> you recall the board gave us extra time to add additional data as we made the projections. we were making those projections on a very small monthly utilization. >> anyway, when we set the rates for 2013, i have in graphic actuarial detail on page 2 to explain exactly how we got where the data set came from, the amount of money we were talking about. what it equates to that we implied an 05 trim and we presented to the board and approved by the board and we have some nice numbers for this year. all of the math, i won't go to all of it,
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equates to 56815. that is through april 2011-march 2012. we go another year forward and use the next year's data and start trending for it with more current information, standard underwriting principals and standard underwriting approach. with that being said sorry about that i will have to turnover. we go to the next page and from march to february. we did lots of linear aggression on your behalf. i brought the chart for everybody's review. you were comfortable with this at the time and we projected a number to the $555.43. i won't elaborate but everything is based on actuarial principals and they stand all the task and
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we are not going to charge your population anymore money in 2014 and your trust fund has money to pay claims. with that being said, any questions? >> you look like you want to ask questions. >> this is not a question. it's a comment to both the employers that we negotiate on behalf as well as to the unions and that is had we not subsidizing the rates and preserved families in blue shield we wouldn't have such good utilization data. the message to the unified school district and the union county in those employers we must engage in contribution methodology that preserve
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healthy people in blue shield. that is what determines the blue shield rates and for that kudos to lisa and marina in terms of working on our contribution and the other unions have accepted that contribution model. if we are going to ri main competitive, and kaiser competitive, the unions must accept the contribution models. >> any other comment? any public comment? item 10: dashboard. >> an an alytic managers
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system. the dashboard system today is a series of on going support of various health plans. today we'll look at our city plan through 2013. we'll be looking at the merging cost and auto utilization for our active and retirees. the majority of the participating city plan are in the retirement program. the numbers look very good for this group of folks. in contrast, the membership has decrease in our active early retiree pools and those that
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have either catastrophic illness and those with no other options live outside of the blue shield or kaiser service areas. so, what we've done with this particular dashboard is really conducted a deep dive in our areas of concern. so to that end we are not looking at necessity depth of our retirees. our areas will look at the areas of concern in the active city plan as well as our early retiree. in the report contents, again we'll be looking at our claims and auto evasion -- utilization for inpatient and outpatient and numbers that we do in the dashboard and we have that separate analysis where we have separated out the heche population to use as a comparative and some notes about the report which
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everything is reported on a basis and any of the increase percentages we provide in the dashboard. at this point i'm going to turnover the presentation to my colleague. >> good afternoon, dr. payton. members of the commission, supervisor ferrel. what i would like to do today is give you an update since i was last here about a year ago. first we'll talk about act ifs and then move to early retirees. if you look at the graph i think it's quite visually noticeable that there is a downward trend. what
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you will notice is that the active rate has been reduced 20 percent. the active membership should they trend continue is projected to be less than 100 members by 2015. of those 700 members 70 are heche members. just to put in perspectives with those numbers. with the declining trend you are seeing
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an increase in age. what i will notice is that the city plan is a ppo model, a preferred provider organization which is a health maintenance organization. but even given that difference you will notice there is an almost that the cost on a member per month basis is twice blue shield and even more on the part of kaiser. and you will also notice that if you compare the two groups that you will find that the city plans on an annual basis it's not an end point basis.
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blue shield is 37 and kaiser is 35. what that does if you are looking at a demographic factor rating whereas 20 is a 1, 40 is a 2, you will see that the city plan because of their age, their demographic factor applied to the rate is 2.29 versus kaiser which is 1.56 because of the cost in the age. this is a very significant issue. what you also noticed even with that, in spite of the decreasing membership that cost continue to grow year over year 13 percent last year which is above the national trend. moving on to page 5, here what we are looking at is the total cost per member per month, what we are looking at you will see
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the city active per member cost increased about 7.5 percent from 2008-2013. the drug cost alone increased 100 percent where as the average drug increase is about 15-17 percent and the city plan at about 22 percent -- annual increase of 37 percent or higher. the heche population cost for inpatient and outpatient. that will be if you are looking at your colored chart, the orange and tangerine. i'm not good at colors. art is not one of my fortes. their inpatient and outpatient cost are only 248 versus 727 for all. so, again
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they are not only younger, they are not utilizeers. moving on to page 6. what you will see here is looking at the admits per thousand. there has been a decrease in the rate of admits moving from 83.2 percent to 65.2 percent. i'm sure doctor will agree, 83.2 percent is a high average. given it's a ppo model, you watch it. however, one of the things that is noted is that because of the low membership, you have a lot of variability in the rates from year to year. and that's why you see some variability between reporting periods. one of the things again drawing out
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. heche just to add to the discussion had no admits in the last 3/4. >> on slide it should be 65.2. >> yes. i'm sorry. there was an error. >> these are admissions into the er. if we move on to page 7.
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9 days per thousand. this again is reflected of the small enrollment, but if you compare it to your other two health plans, you will notice that blue shield is at 169 and kaiser 185. so what does that mean? if you would set uhs is the baseline, you would find if they would make blue shield the baseline, you would expect them to be about 300 admits and
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kaiser about 280. they exceeded even if they are one. they are above and beyond what you would predict for utilization. now as far as the average, as you remember, uhs is a length of time of average length of stachlt -- stay. it's 6.5. it far exceeds the norm for northern california, in the sense that it's usually expected to see it under 5. we did want to point out but just in passing because we don't know the amen of the maternity for individuals. this was surprising the age is 48 so you would expect higher risk
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pregnancies which means longer days of stay. we don't know the age of the people that had the babies. we can't say much. again, looking at heche which is what you would expect having admits in 3 of the four last quarters. their average stay is under one day.1 day. moving on to page 9, what is the total cost per day. it's 42 percent per year. this corresponds to 75 percent of that cost increase due to several high cost claimants. as you can see you have one that's almost $500,000, another slightly over $300,000, one about $300,000 and the last one for $120,000.
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what that results is that the average cost per day because of these high cost claimants and small numbers is about $96 hundred whereas if you look at heche alone is 2581. >> it's hard to compare heche to the rest of the population accessibility is a big issue than just the population in general. >> it's interesting, thank you for the segway because if you look at outpatient survey you know that heche has higher rate outpatient. a use of outpatient service is more cost-effective. what we want to point out is as
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you noticed the trend line is slow moving. it's not a great deal. emergency rooms have increased about 12.6 percent and emergency visits about 8.5 percent over the past 5 years. moving on to the professional procedures per thousand. one of the things we want to do is start out with what the benchmark is for a professional procedures. this is office, lab, all types of things that are billed on the outpatient side. you would expect to see about 15 different types of services per person or 15,000 per thousand members. what you see for the city plan is that they are about two times that in 29200. of those 19,000 of these services were coded as other. it's not worth a lot of
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money, it's about $5 per member per month. what we are looking at is they are supplies, alternative care services and lab and one of the things we are doing is exploring more with uah on how they code and how they count because that is something we need to bring back further information to you. lastly on the generic drugs. i'm not quite done. what you see is that as the generic substitution rate has grown by 22 percent over the past 5 years and for ppo it exceeds 74 percent, that is a wonderful number. you have to give yourself credit because you did make some plan designs in 2009 and 2010 that caused the increase in the general --
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generics. you saw the results of the plan action. moving on to the cost on a per month basis. the cost have increased to 7.7 percent in the last year. the industry trend is about 4-5 percent. as you noted, you looked at the charts on the right hand side of the page, that the city plan is again somewhere slightly about double to just slightly under double either what blue cross or what kaiser spent for their pharmaceuticals. we did look at what is causing this and you will notice that you have a lot of the antivirals, you have other hormones which is hormone used to address hiv with, you have the anti-any -- plastic and that is the narcotics and
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25 percent. >> can you identify anti-plastic? >> it's the anticancer drugs. >> cord -- according to the heart association, the drug stat ins, basically calling this a great big farce. i think i have said it here before, the pessimistic meta induction theory, where in science, scientific method everything we know today will be over turned tomorrow and everything should be taken with a grain of salt. if you

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